It’s official: the German parliament has passed long-anticipated cutbacks in the country’s generous feed-in tariff system of subsidies for solar photovoltaic power generation (Solar Association press release in German). The subsidies will be reduced by 11 to 16% depending on the type and size of installation. The new rates were adopted by the Bundestag today and take effect from July 1. Further cuts are expected from the start of next year.
The German Solar Power Association immediately blasted the legislation, an amendment to the Renewable Energy Act (EEG). System manufacturers such as SolarWorld AG have complained that the rate reduction is greater than can be offset by declining production costs. The new regulations will also bar building of solar power plants on farmland, a move the Solar Association called “unacceptable”.
Representatives of the governing coalition countered that the amendment eliminates a burden that “bestows dream returns on investors and rising electricity prices on consumers.” They also noted that the rates in effect until now have favored foreign manufacturers, who supply 60% of all solar modules installed in Germany.
The legislation does include a few bright spots for solar advocates. Generation for the operator’s own use will be subsidized for the first time, although support will be less generous than proponents had hoped. The legislation also explicitly opens brownfield sites and strips alongside roads and railways to solar development and establishes a €100 million research and development fund.